Using PayPal with GnuCash

If you use a credit card/merchant account or PayPal and are trying to figure out how to make the payments reconcile in GnuCash, I took a hint from this link: http://www.intragenesis.com/techtips/articles/how_to%20set_up_and_use_paypal_in_quickbooks and applied it as follows:

Assuming you've installed GnuCash (What is it? It's a free accounting program, like QuickBooks, but not as fancy. It gets the job done, though.)

And you've set up the basic "Business" account Chart of Accounts (or if you haven't, don't panic, it's ok...)

BACK UP your data. Nothing here is destructive, but it's a good idea to back up.

In Assets, Current Assets, create a new Account:
Account name: PayPal
Account code: can leave blank if you wish
Description: PayPal
Account Type: Bank
Parent Account: Current Assets (or, the parent of your Checking Account)
You'll want to include any particular Opening Balance and include today's date. If you miss this, you can always add an adjustment later.
Click [OK]

In Expenses, create a new Account:
Account name: PayPal Fees
Description: PayPal Fees
Account Type: Expense
Parent Account: Expenses (or if it makes sense elsewhere, include it there).

Now, all you'll do is process payment:
Business, Customer, Process Payment
Customer, Select
Invoice, select
Enter the full amount (if the full amount is paid). For instance, if the invoice is $100, and the customer submitted $100 to PayPal, enter 100.00 in the amount.
Post To: Assets:Accounts Receivable (probably, or what you've already chosen as the Receivable account for the invoice.)
Transfer Account: PayPal

Next, open the PayPal Account and Enter a transaction:
Description: "PayFees" or something.
Transfer: Expenses: PayPal Fees
Withdrawal: the amount of transaction fees deducted from the PayPal deposit

When you're ready to transfer PayPal to your Checking Account,
Open the "Checking Account" account and click Transfer:
The amount will be what you're transferring from PayPal.
Transfer From: PayPal (under Current Assets)
Transfer To: "Checking Account"
Click OK.